Cash deposit in mutual fund, bank FDs that can attract income tax notice

 







The income tax department has become quite strict on cash transactions. They are keeping an eye on our deposits and withdrawal in such a way that even if we don't report about the transaction, they would come to know via balance sheets of banks, mutual funds and other institutions with which we have transacted. So, it's better to know one's limitations and remain inside that restriction. So, if someone is planning to invest in bank fixed deposit (FD), mutual fund, equity market or in bonds, there is a limit beyond which cash or digital deposit may attract income tax notice.

Speaking on cash deposit limit in bank fixed deposit Mumbai-based tax and investment expert Balwant Jain said, "If a bank depositor invests ₹10 lakh or above in one's FD account, then the income tax department may send notice to such bank FD account holder. In fact, ₹10 lakh or above deposited digitally is also liable for income tax notice. So, one should know the limit beyond which bank FD deposits either in cash or in digital form will attract income tax notice."

Highlighting the income tax rules on cash deposit in mutual funds, stock markets and bond markets SEBI registered tax and investment expert Jitendra Solaniki said, "In case of cash deposit to the tune of ₹10 lakh or above either in mutual fund, direct stock market or in the bonds, may attract income tax notice. In fact, the deposit of such amount in digital form is also liable for income tax notice."

On bank drafts via cash deposited in the stock market Balwant Jain said, "Even if you use cash for making bank draft and deposited it in your Demat Account, both broker and the bank will inform about your cash transaction in their respective balance sheets and hence income tax department will send you notice in that case too." Jain said that in that case the notice will be more serious than in other cases specified above.


Download our App to get knowledge updates: https://play.google.com/store/apps/details?id=com.app.gstmitraa
Join Our Telegram Channel for more updates: https://t.me/praveengst

Comments

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the opti
Read more

Income Tax Return or ITR for FY20 Can Be Filed Till May 31

Image
  n the wake of severe Covid-19 pandemic, the Central Board of Direct Taxes (CBDT) has decided to extend timelines of various tax compliance dates on Saturday. “In view of the adverse circumstances arising due to the severe Covid-19 pandemic and also in view of the several requests received from taxpayers, tax consultants & other stakeholders from across the country, requesting that various compliance dates may be relaxed, the Government has extended certain timelines today," the ministry of finance said in a statement. The move is aimed at mitigating “the difficulties being faced by various stakeholders," it further added. The “relaxations are the latest among the recent initiatives taken by the government to ease compliances to be made by the taxpayers with the aim to grant respite during these difficult times," it mentioned in a notification. “It’s a welcome move to extend the timeline of various tax compliances as the country is struggling with severe second wave
Read more